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TIGHT SPOT

9th August 2019

By: Darlene Creamer

     

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In a note explaining its revision of South Africa’s credit outlook from ‘stable’ to ‘negative’, Fitch Ratings said the decision reflected a marked widening in the Budget deficit as a result of lower growth and increased spending, including higher spending to support State-owned enterprises. In other words, the fiscal imbalances, which grew uncontrollably during the low-growth State capture years, are really starting to catch up with us. Sadly, there are still some politicians who think government is in a position to spend its way out of trouble.

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